The present invention relates to validating payments during transactions. In particular, embodiments of the invention relate to validating check payments presented during transactions.
A traditional negative file consists of account holders (i.e., individuals or organizations with checking accounts) that currently have outstanding returned checks at a retailer that is a member of the shared check authorization network (“SCAN”). Whenever an account holders presents a check to a retailer, the retailer determines whether the account holder has any unpaid returned checks by cross-referencing the negative file. Many of the account holders listed in the negative file, however, unintentionally write checks with insufficient funds in their checking accounts. Account holders may have incomplete or inaccurate knowledge concerning the balance in their account or may have forgotten to transfer or deposit money to cover recent checks. Many of the account holders listed in the negative file may pay off their returned checks quickly, and frequently will have money in their account to cover future issued checks. When this type of account holder gets turned down for a transaction because they appear in the negative file, the retailer loses a sale and potentially creates a customer service issue, when, in reality, the retailer may have declined a valid form of payment and may have lost a sale unnecessarily.